Mills v ASB Bank Ltd - [2020] NZCA 228

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA506/2019
[2020] NZCA 228

BETWEEN	LYNETTE JOY MILLS Applicant
AND	ASB BANK LIMITED Respondent

Court:	Miller and Clifford JJ
Counsel:	Applicant in Person M V Robinson for Respondent
Judgment: (On the papers)	11 June 2020 at 10 am

JUDGMENT OF THE COURT

AThe application for leave to appeal is granted on the question of whether the District Court was correct to grant summary judgment on part of the applicant’s statement of claim.
BThe application is otherwise declined.

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REASONS OF THE COURT

(Given by Clifford J)

The applicant, Ms Lynette Mills, along with her partner, Mr Carl Peterson, is suing ASB Bank Ltd for losses she says the bank caused by defaulting on its obligations under, primarily, the Credit Contracts and Consumer Finance Act 2003 (the CCCFA) and the law of negligence.
ASB applied for summary judgment, or in the alternative, that Ms Mills’ and Mr Peterson’s claim be struck out. Judge Courtney granted summary judgment in favour of ASB in respect of most of Ms Mills’ claims and struck out Mr Peterson’s claims in their entirety.[1] Clark J dismissed an appeal by Ms Mills to the High Court,[2] and declined an application for leave to appeal that judgement to the Court of Appeal.[3]
[1]Peterson v ASB Bank Ltd [2018] NZDC 14505 [District Court judgment].
[2]Mills v ASB Bank Ltd [2019] NZHC 1505 [High Court judgment].
[3]Mills v ASB Bank Ltd [2019] NZHC 2383 [Leave judgment].
Ms Mills now seeks special leave to appeal to this Court.

Background

The relevant background to the dispute, including the role of Mr Peterson, is described more fully in the District Court judgment at [1]–[21] and in the High Court judgment at [3]–[22]. Briefly, Ms Mills and her former partner Mr Mills had a credit facility with ASB in which they each held a mandate to operate the account independently of one another. When Mr Mills and Ms Mills separated, Mr Mills signed an agreement with Ms Mills’ new partner, Mr Peterson. The purpose of the agreement was to transfer Mr Mills’ share of the former couple’s property interests to Mr Peterson, and — in return — for Mr Peterson to pay Mr Mills a sum of money and assume liability to ASB under the shared account and relevant mortgages.
Due to previous dealings with Mr Peterson that concerned ASB employees, the bank declined to advance him credit, a matter which caused him some difficulty in implementing his obligations under the agreement. In addition, while Mr Mills undertook to refrain from using the shared account for his own benefit, he was not removed as a signatory and continued to hold an independent mandate over the account.
The events at issue in this litigation concern several transactions and alterations to that account conducted across the course of June and July 2015:
(a)On 19 June 2015, Mr Peterson deposited $40,000 into the shared account, for the future use…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] NZCA 228
Decision Date: 11 June 2020 at 10 am

CaseChat Overview and Summary

In the matter of Mills v ASB Bank Ltd, the plaintiff, Ms Mills, filed a lawsuit against ASB Bank Ltd, alleging multiple breaches of consumer credit legislation, among other claims. The District Court was tasked with resolving whether ASB Bank Ltd was entitled to summary judgment on all of Ms Mills' claims, except for one specific allegation of a breach under the Consumer Credit Code Fair Trading Act (CCCFA). Judge Courtney found that ASB Bank Ltd had a valid defence to all of Ms Mills' claims, except for the claim regarding the bank's failure to provide prior notification of a reduction in the credit limit, which was governed by s 22 of the CCCFA. Despite this concession, the Judge ruled that ASB Bank Ltd was entitled to summary judgment on all causes of action except the one concerning the CCCFA breach.

The central legal issue in this case revolved around the interpretation and application of r 12.2 of the District Court Rules 2014. Specifically, the court had to determine whether the defendant could obtain summary judgment against the plaintiff when the plaintiff had established a tenable cause of action under the CCCFA. The ruling in Westpac Banking Corp v MM Kembla New Zealand Ltd provided a relevant precedent, distinguishing between summary judgment and the striking out of a claim. According to this precedent, summary judgment is a procedural mechanism that requires evidence beyond the pleadings, whereas striking out a claim is usually determined solely on the basis of the pleadings. The court had to ascertain whether the District Court judge's decision aligned with these principles.

The court reviewed the District Court judgment and found that Judge Courtney erred in granting ASB Bank Ltd summary judgment. The principles set out in Westpac Banking Corp v MM Kembla New Zealand Ltd and the plain language of r 12.2(2) indicated that once a tenable cause of action was established, the defendant could not obtain summary judgment. This error meant that ASB Bank Ltd was not entitled to summary judgment on all causes of action except for the CCCFA breach. Consequently, the court had to set aside the District Court's judgment and remand the matter for further proceedings, ensuring that all claims were properly assessed.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The power to give summary judgment is provided for by r 12.2 of the District Court Rules 2014:12.2Judgment when there is no defence or when no cause of action can succeed(1)The court may give judgment against a defendant if the plaintiff satisfies the court that the defendant has no defence to any cause of action in the statement of claim or to a particular cause of action.(2)The court may give judgment against a plaintiff if the defendant satisfies the court that none of the causes of action in the plaintiff’s statement of claim can succeed. As this Court explained in Westpac Banking Corp v MM Kembla New Zealand Ltd, an application for summary judgment by the defendant is distinct from an application for strike-out, or an application for summary judgment by the plaintiff:[18][58] The applications for summary judgment were made under r 136(2) of the High Court Rules which permits the Court to give judgment against the plaintiff “if the defendant satisfies the Court that none of the causes of action in the plaintiff’s statement of claim can succeed”.[59] Since r 136(2) permits summary judgment only where a defendant satisfies the Court that the plaintiff cannot succeed on any of its causes of action, the procedure is not directly equivalent to the plaintiff’s summary judgment provided by r 136(1).[60] Where a claim is untenable on the pleadings as a matter of law, it will not usually be necessary to have recourse to the summary judgment procedure because a defendant can apply to strike out the claim under r 186. Rather r 136(2) permits a defendant who has a clear answer to the plaintiff which cannot be contradicted to put up the evidence which constitutes the answer so that the proceedings can be summarily dismissed. The difference between an application to strike out the claim and summary judgment is that strike-out is usually determined on the pleadings alone whereas summary judgment requires evidence. Summary judgment is a judgment between the parties on the dispute which operates as issue estoppel, whereas if a pleading is struck out as untenable as a matter of law the plaintiff is not precluded from bringing a further properly constituted claim.[18]Westpac Banking Corp v MM Kembla New Zealand Ltd [2001] 2 NZLR 298 (CA). In the District Court, Judge Courtney recorded that ASB has conceded before him that it was arguable the bank had technically breached its disclosure obligations under s 22 of the CCCFA by not giving Ms Mills prior notification of the reduction in the account’s credit limit.[19] He therefore concluded ASB had not established a complete legal answer to Ms Mills’ claim on that ground.[19]District Court judgment, above n 1, at [67]. Nonetheless, after concluding that ASB had a good defence to all of Ms Mills’ other causes of action, the Judge determined that “ASB is entitled to summary judgment against Ms Mills on all causes of action apart from the claim for breach of s 22 CCCFA”.[20] As is clear on the face of r 12.2(2), and the principles expressed by this Court’s judgment at [17] above, it was not possible for ASB to obtain summary judgment against Ms Mills once the Judge concluded that her cause of action under the CCCFA was tenable. As Clark J recognised in the High Court and Mr Robinson conceded in submissions before this Court, this was plainly an error by the Judge.

Ratio Decidendi

Legal Principle Established

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